BOARD OF TRUSTEES OF THE PORT OF BOMBAY versus JAI HIND OIL MILLS COMPANY AND OTHERS

Citation: [1987] 1 S.C.R. 932 · Decided: 09-01-1987 · Supreme Court of India · Bench: E.S. VENKATARAMIAH · Disposal: Disposed off

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
BOARD OF TRUSTEES OF THE PORT OF BOMBAY 
v. 
A 
\ 
JAi HIND OIL MILLS COMPANY AND OTHERS 
JANUARY 9, 1987 
B 
[E.S. VENKATARAMIAH AND K.N. SINGH, JJ.] 
Major Port Trusts Act, 1963: Sections 5,48 to 65. Bombay 
~ 
Customs House Public Notice No. 111 dated July 29, 1985; Paragraph 
2(a). 
Goods detained by Customs House at Port-Clearance of- Y' 
c Demurrage charges levied by Port Trust-Necessity for Court to en-
sure payment . . 
'f 
r 
The Major Port Trusts Act, 1963 empowers by cl.(d) of s.48 the 
Board of Trustees, constituted under that Act, to impose rates in res-
D 
pect of wharfage, storage or demurrage or goods at the port. Sectioo 53 
of the Act empowers and Board in spttial cases to exempt either wholly 
or partially any goods from payment of any rate or of any charge 
leviable in respect thereof or remit the whole or any portion of such rate 
or charge so levied. The Port Trust had in consultation with the 
Customs authorities provided for grant of coocession in the matter of 
E payment of demurrage charges oo the issue of detention certificate by 
~ 
the latter. 
Paragraph 2(a) of the Bombay Customs House Public Notice No. 
111 dated 29th July, 1985 provides for a regular detentioo certificate to 
~ 
he issued where the goods are detained by the Customs House for the 
F 
bona fide operatioo of import cootrol formalities. 
·..; 
A dispute arose between the !st respondent and the Customs i 
authorities with regard to the basic customs duty payable 00 the goods 
imported by the former. By an interim order passed in a writ petition 
filed by the respoodent, the High Court directed the Customs autho-
G 
rities to allow clearance of the consignments oo respondent furnishing a 
bank guarantee in respect of the disputed amount of duty payable, in 
favour of the Collector of Customs. The respoodent, however, failed to 
clear the goods from the Port. 
__,__ 
Since the consignments were incurring demurrage the respoodent 
H 
filed another writ petition seeking a direction to the Customs authorities 
932 
i 
-y 
• 
TRUSTEES PORT v. JAi HIND OIL MILLS 
933 
to issue detention certificates, which was allowed by the Court on the 1st A 
respondent giving an undertaking that it would pay the demurrage 
amount if it failed in the earlier writ petition. The Customs authorities 
were, thus, obliged to issue the detention certificates. 
,,.-
The Port Trust was not made party to any of the writ petitions. It 
refused to honour the detention certificates and to grant remission of B 
demurrage unless the respondent gave a bank guarantee to the extent of 
80 per cent of the fees claimed. The High Court, however, by an interim 
order, in the writ petition filed against the Port Trust, directed the 
clearance of goods without payment of demurrage and without insisting 
on the bank guarantee. The appeals filed against the aforesaid orders 
were summarily dismissed by the High Court. 
c 
In the appeals by special leave, it was contended for the appellant-
Port Trust, that the High Court should not have directed the Customs 
authorities to issue detention certificates without the Port Trust being 
made a party to the writ petition and in any event without passing an 
order duly providing for the payment of the wharfage and demurrage D 
charges due to the Port Trust in the event of the first respondent failing 
in its cont~ntion, and that the Hi~ Court had committed an error in 
directing the first respondent to give a bank guarantee only in respect of 
the customs duty payable and not malting a similar order with regard to 
wharf age and demurrage charges payable to the Port Trust. 
Disposing of the appeals, the Court, 
HELD: l. The power of the Port Trust to fix rates of demurrage 
and to recover the same from an importer and to show concession as 
regards demurrage charges in certain specified cases bas been re-
E 
cognised. [942F-G] 
F 
Trustees of the Port of Madras v. M/s. Aminchand Pyare/al & 
Others, [1976] I SCR 721 and The Board of Trustees of the Port of 
Bombay v. Indian Goods Supplying Co., [ 1977] 3 SCR 343, referred 
to. 
2.1 The orders passed by the High Court in the proceedings to 
which the Port Trust was not a party, were not binding on the Port 
Trust in view of the violation of the pi inclples of natural justice. [943G-H] 
G 
2.2 The Port Trust being a body corporate constituted under 
Major Port Trusts Act, 1963 was entitled to be heard by the Court 
H 
A 
B 
934 
SUPREME COURT REPORTS 
(1987] 1 S.C.R. 
before an

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